Thursday, March 8, 2012

By Steve Baker
This year at the Oscars, my favorite nominee for Best Picture was Moneyball starring Brad Pitt.

Many think it is a great baseball story but to me it is a terrific business story with lessons to help small businesses compete in a big money world. It’s a story about underdogs who had to rethink how to level the playing field against incredible odds.

In 2002, Oakland Athletics general manager Billy Beane (played by Brad Pitt) had a huge problem. The big money teams like the New York Yankees had lured away his top talent.

By comparison, the New York Yankees spent more than $125 million in payroll in the 2002 season while the small market A’s were limited to less than $40 million.
Beane knew the Yankees and most other teams had an unfair advantage with their big budgets but the A's new owners refused to spend any more money. They demanded that the team be treated as a business and charged Beane with the task of winning in the Major Leagues with a budget that was smaller than that of nearly every other team.

Beane understood that he could not compete when playing the same game against the big teams and bigger budgets. He had to try a different path of do or die. In a desperate need for a way to compete, Beane went against conventional wisdom and set out to develop his own new unfair advantages with tools that didn’t require a lot of capital investment.

He turned to analytics.

Beane listened to new ideas and hired a 25 year old Yale graduate student who was a master at analyzing stats that were not generally considered top priority in the average scouting process. Ignoring traditional recruiting techniques, the A’s took advantage of more empirical gauges of player performance to build a team that could successfully compete in Major League Baseball. The new team was built with young players and cast-off older players who didn’t fit the norm.

The results?

The Oakland A’s finished 1st in the American League West with a record of 103 wins and 59 losses, and set an American League record of winning 20 consecutive games. The A’s won the exact same number of games that the Yankees won, but the Yankees spent $1.4 million per win and the A’s paid $260.000.

The recruiting game was forever changed.

Like many startup and growing businesses owners, Billy Beane was willing to try an idea that was disruptive to traditional thinking. He listened and hired an expert to assist him in creating a new plan.

Beane lacked the belief or support of his scouting staff, many of the players, the media and even the team’s manager who fought and ridiculed him every step of the way. But he committed himself to it and did not change course.

I suggest that you watch Moneyball movie twice; the first time for pure enjoyment of a fun film and the second time with your finger on the pause button, ready to take notes.

There are many lessons for business in the movie’s dialogue. Here are a few of my favorite quotes:

• “There are rich teams and there are poor teams, then there’s fifty feet of crap…and then there’s us. It’s an unfair game.” (Be honest about where you really are in your business)

• “Your goal shouldn’t be about players, your goal should be to buy wins.” (Keep the real objective in sight and in mind)

• “A dollar for a soda?...Welcome to Oakland.” (Don’t blow the value of goodwill by being cheap with pennies…it’s the old penny wise – pound foolish)

• “We’re not New York. Find players with the money that we do have.” (Be honest and firm. Play the cards you’re dealt)

• “You guys are talking the same old nonsense; we’ve got to think differently.” (Clean the slate and start from scratch)

• “The first guy through the wall always gets bloody.”

• “When you get the answer you want, hang up.” (keep it short and to the point)

• “We’re going to rethink the game. If we win, this team will have changed the game.”

• “The question we should be asking is do we believe in this thing or not?”

How about you? Please share your thoughts and any favorite Moneyball lines. Shoot me an email at steve@pushingwater.com

May all your hits be homers and you have a winning season!

Steve Baker is a founder of successful businesses and a business advisor with a passion for every phase of business cycle from startup to exit. He is also a public speaker and author of the award winning book "Pushing Water Uphill With a Rake." He lives in Colorado and is an avid poor golfer. He welcomes your e-mails at steve@pushingwater.com and invites you to visit his website: http://www.pushingwater.com.

Wednesday, February 1, 2012

I use the term "hat rack management" to describe what startup and small business managers go through.

As managers, you wear many hats: management, sales & marketing, accounting, production, IT, strategic planner, fireman, custodian, the list goes on and on. So all day long, you are mentally running back and forth to the hat rack to change hats to fit the immediate task at hand. Most days you are attempting to wear multiple hats at once. After all, everything has to be done, and you're the one who has to do it. You

have the skills and drive that started the business, and you know it best.

But guess what? The truth is that you can't know everything or do everything well, and some of those hats just don't fit.

I was fortunate to figure this out early in my business life. I was starting my first business while still in college. As a business major I was taking as many courses as possible including an advanced accounting course. As a young business owner, I knew that I had to understand accounting but I also realized that I didn't like it. My strengths have always been in developing and executing business and marketing plans and the accounting hat is a uncomfortable fit on me.

After a few days in class, I went to the instructor to inform him that I was dropping his class to pick up an additional marketing course because I wanted to strengthen my expertise. I knew that accounting was one hat that would never fit my head. Acknowledging that I could not wear it well directed me to outsource this important function to those who have a passion to do it well. Not trying to squeeze my head into the wrong hat left my brain fresh to do what I do best. Conversely, if you're a top-notch CPA, chances are very good that marketing hat doesn't fit you well.

Spend your time and talent wisely. Every hour spent on things that are not your expertise is distracting you from what you do well and will adversely affect your overall performance. Trying to wear a hat that doesn't fit will give you a headache. It will wear you down, cause frustration and diminish your overall effectiveness. So play to your strengths. There may be an added cost to pass tasks to others but you will gain it back in increased productivity and efficiencies.

Another negative consequence in trying to wear too many hats and do everything yourself is that it can become a bad habit that turns you into a micro-manager (that's a nice term for control freak) who cannot or will not delegate. Micro-managers tend to run roughshod over others and inhibit growth in their employees.

Yes, in the very beginning, you must and will do it all. But for the sake of your company's success and your own peace of mind, truthfully analyze your strengths and weaknesses (see my article on SWOT) and decide where you need others' expertise. Then set and follow a new plan to transition the delegation of these tasks to others.Hats off to your success!

Thursday, January 19, 2012

To continue the growth and success for your business, you need to periodically step back and analyze what’s going on. One of the best tools I have used for years is the SWOT Analysis.

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.

SWOT analysis was developed from research conducted at Stanford Research Institute in the 1960s and is an extremely useful tool for a deeper understanding for all sorts of situations in business and organizations. I have found it helps me balance the decision making process.

The SWOT headings provide a good framework for reviewing strategy, position and direction of a company or business proposition. It helps you to quickly identify and manage threats and uncover new opportunities. In most cases, you’ll find strengths and weaknesses to be internal while opportunities and threats will be more external.

I prefer using it with a team of managers or all members of a department. Using a big dry-wipe board, I’ve found that the best way is to think fast and write down items as you think of them. Then go back and add and further define. Don’t be humble when listing your strengths but be brutally honest in listing weaknesses and threats for it is through constructive criticism that they can be overcome.

Make a four box grid with the following headings and start adding items under each heading.

Strengths,Weaknesses, Opportunities &Threats

Here are a few general examples:

Strengths:

In what ways are you better than your competition?

Your organization's Unique Selling Proposition (USP)?

Resources, assets, people?

Experience, knowledge, data?

Financial reserves?

Marketing - reach, distribution, awareness?

Price, value, quality?

Weaknesses:

Lack of competitive strength?

Reputation, presence and reach?

Cash flow, start-up cash drain?

Reliability of data, plan predictability?

Morale, commitment, leadership?

Poor quality control?

Opportunities:

New markets, vertical, horizontal? Technology development and innovation

Geographical, export, import?

Market need for new USP's?

Market response to tactics, e.g., surprise?

Major contracts, tenders?

Business and product development?

Partnerships, agencies, distribution?

Threats:

New regulations?

New competitors entering market?

Competitor intentions?

Market demand?

New technologies, services, ideas?

Financial and credit pressures?

Economy - home, abroad?

The SWOT analysis has multiple uses.

The brains at Stanford Research Institute spent ten years using SWOT with over 1,100 companies verifying that SWOT analysis is a powerful model for many different situations and is a valuable aid in the decision making process.

Some of important Stanford examples of how companies use a SWOT analysis are:

A company’s position in the market, commercial viability, etc.

Methods of sales and distribution

Competitors

New products or brands

A business idea

Strategic options, such as entering a new market or launching a new product

An opportunity to make an acquisition (or be acquired)

A potential partnership

Changing a supplier

Outsourcing a service, activity or resource

Project planning and project management

An investment opportunity

Personal career development - direction, choice, change, etc.

You’ve probably guessed by now that I’m sold on SWOTing my business decisions. Completing a SWOT analysis is very simple, and is a good subject for workshops and brain-storming sessions. The beauty of the SWOT analysis is that you can use it in a very quick and basic form or create a very detailed strategic assessment, as your needs require.

After using this powerful tool a few times you will begin to look at things with a new mindset – one that automatically looks at various considerations and ideas that will help your business grow. By looking at your business, your competitors and yourself using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, discover new opportunities, and compete successfully in your market.

So give your business a good SWOT and let me know how it works for you.

Wednesday, September 14, 2011

Where is your next business?Your new business may be right in front of you but you have to learn how to see it. I’m a huge fan of Bev Doolittle. She is often called a "camouflage artist" because her distinctive use of context, design and pattern help viewers discover images and meanings which seem hidden only until they become obvious and then, bam, they’re right in front of you.

Often, new business opportunities are hidden in plain sight, right in front of us until like Doolittle’s art, we view them differently.

Anyone who has ever driven across Wyoming has noticed the miles and miles of snow fences. As I drove across those lonely highways I looked at the snow fences flying by and, like most of you, just thought, “Boy, that’s a lot of wood.”But some entrepreneurs look deeper and see beyond what’s in front of them.

I recently met with an interesting business group in Laramie, Wyoming. The founders of this company drove by those fences everyday and wondered what happened to all that wood when the fences needed repaired. Their investigation found that it was burned or tossed in landfills.

One person’s trash is another one’s treasure.

So in 1999 the founders created Centennial Woods and cut a deal with WYDOT to reclaim the wood from snow fences across Wyoming and replace it at no cost to the state.

John Pope, the company’s CEO explained, “We created the perfect win – win business relationship. The state gets miles of snow fences repaired for free and Centennial gets raw materials for our business.”

The company trims and sizes the sustainable harvested wood and sells the boards for both interior and exterior applications across the United States and Europe.

Snow fence boards harvested by Centennial Woods can range in age from 7 to 25 years old, giving it a distinguished look that’s a true product of Wyoming’s wild and windy weather: snowy winters, arid winds, clear skies, and abundant sunshine. The wood is a stunning mixture of grays and browns in unique grain patterns that are characteristic of the windblown state of Wyoming.

But instead of being broken down by the weather, the wood is naturally weathered and strengthened by it, or as Pope calls it, “perfectly cured.”

Since snow fence boards don't touch the ground, the wood isn't affected by bugs or ground moisture making it extra resilient. And, unlike other reclaimed woods, Centennial’s have never been painted or chemically treated, and are completely free of lead and other hazardous treatments common in older barns and other structures. That’s important in the green building industry and Centennial was LEEDS certified.

What for years was overlooked and discarded is now an excellent lumber choice for interior and exterior building/remodeling projects of the rustic variety. The company has repurposed more than 7 million feet of reclaimed wood from snow fence, saving Wyoming more than $10 million and avoiding more than 9,000 tons of CO2 emissions.

So, Centennial Woods is the newest winner of the Steve Baker “Duh, Why Didn’t I See That?” award.

Because these entrepreneurs focused on something with a curious eye, they peered deeper and discovered something that the rest of us missed. Centennial Woods exploited a business opportunity and created a thriving international business that has grown to become one of the largest providers of reclaimed wood in the world.

If you know of other creative companies that have made something big out of something else, please leave me a comment or shoot me an email. I’d love to know them.

Thursday, April 21, 2011

It's about who they are, not just what they can do There are signs that the economy is beginning to pick up and companies are starting to hire once again.

As an executive of fast growing companies, I have always taken pride in the quality of our employees and have always felt they were the best. We didn't find these employees because we were lucky; it was by following our plan for finding the best people for every position in every department.
Here are my three tips:

Tip 1: Core Capability Strengths

Okay, this is the DUH tip. This obvious first tip is to find people with the strong core capabilities to perform the required and requested tasks. Interviewing and testing for the skill competencies to complete the department tasks goes without saying. But many young companies stop at this first step and make their hires. They regret it later.

Tip 2: Core Character Strengths

Because our companies were exploding in growth, we wanted strong entrepreneurial spirits. But just as important to us was the strength and quality of a person's character.
After it was determined that a person had the skills we were looking for, we conducted a final interview to look for the quality character traits that would fit our goals and the company personality for the team that we were building.

The character traits we were searching for:
• Strong work ethic. They worked or took on responsibilities at an early age and a work ethic is part of their being
• Accepted risks, handled pressure and paid the price to reach their goals
• Honest with a high degree of integrity
• Quick thinkers and learners with an insatiable appetite to learn and grow
• Competitive, with the drive to strive and win in whatever they are doing
• Will follow the company plan but have the ability to take charge when needed
• Enjoy being part of a team and participated for the good of all
• A positive attitude, sense of humor and enjoyment for life
• The desire and ability to become a leader in his or her department and grow within the company

So, I can hear some of you saying, "Who are you looking for, Steve, a Boy Scout?" Well, growing up as a Boy Scout myself, I think the laws of a scout can pretty well set your course for finding great employees: Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean and Reverent, along with working hard to get those merit badges.

Tip 3: Look Outside Your Industry

Many companies hire only within their industry. I think this is a big mistake. People in the same industry too often think alike, act alike, and believe they already know everything about the industry.

Starting at the management level, it's clear that success is driven by a creative team. I've had greater results in building a strong team by looking at successful people from other industries with transferable skills and new ideas and approaches. My process has been supported by the Stanford Project on Emerging Companies, an eight-year study of nearly 200 Silicon Valley startups conducted by Stanford Graduate School of Business.

The results of the study confirmed that founding and senior management teams with a variety of prior company affiliations and broad functional diversity tend to be more successful more quickly.

The study showed evidence that "putting together teams that are diverse with respect to both functional diversity and prior company and industry experience is a good thing. It's not just about who knows what, but where they come from."

I have found that the same is true across all levels of employees. Because they come from different backgrounds, they work together to learn your industry and how to apply their knowledge and experiences. Diverse teams will bring more perspectives and different sets of information together and often do a better job of solving problems and being creative as a team.
Diversity of industry experiences increases employee engagement.

As stated in "The Economics of Engagement" published by the Human Capital Institute, "A fully engaged worker brims with enthusiasm, they contribute ideas, are optimistic about the company and its future, are seldom absent from work, typically stay with the organization longer and are among the organization's most valuable ambassadors."

By building a team with strong core character traits coupled with core capabilities and diverse experiences, you can create an unstoppable force for your company.

Friday, April 23, 2010

After nearly two years of research and planning, I’m pleased to announce that my international team & I have officially launched International Wellness Resorts Inc. This startup business represents a unique combination of short and long term revenue streams working in a complementary fashion: medical tourism, hospitality and land development with the theme of ultimate personal wellness.

We plan to build and operate a number of wellness centers at resort locations around the world that will provide common and proprietary healthcare treatments. The treatments will be offered in combination with travel within the new industry of medical tourism.

Medical tourism (also called medical travel, health tourism or global healthcare) is a term initially coined by travel agencies and the mass media to describe the rapidly-growing practice of traveling across international borders to obtain healthcare.

A forecast by Deloitte Consulting projected medical tourism originating in the U.S. and Canada could jump by a factor of ten over the next decade. The report estimated 1.6 million North Americans will travel overseas for health care in 2010, spending billions of dollars. Steve Forbes stated “Medical tourism is a fast growing phenomenon which will be a $40 Billion industry (worldwide) in 2010.”

Initially, we will participate in medical tourism through the provision of a proprietary treatment for relief from migraine headache pain at a newly constructed temporary medical facility in the beautiful resort destination of Placencia, Belize.

We will secure necessary permits from the government of Belize; recruit doctors to participate and conduct treatments with a minimally invasive surgical procedure. Patients will be provided resort accommodations during their stay in Belize.

Placencia, Belize has been selected as the site of the initial wellness center because of its growing popularity as a Caribbean tourism destination by United States and Canadian residents. A former British colony, citizens speak English and the country accepts the U.S. dollar as a currency. Visitors enjoy some of the finest beaches in the Caribbean and the second largest coral reef in the world.

Additional proprietary healthcare treatments will be secured or licensed to differentiate our wellness centers from all other competitors. A variety of wellness, cosmetic and other spa products and services will also be offered. Our services will be directly marketed and promoted through established medical tourism businesses within the United States, Canada, Europe and Belize.

Upon successfully attaining full scale operations in Belize, we plan to replicate its business model at numerous locations across the globe to serve large population centers. These locations will match our Belize center in maintaining world class health standards with a resort experience.

If you would like to review the information on our investment opportunity, please email me at Steve@PushingWater.com

and if you know of someone who may be interested, please have them contact me.

Oh, and one more thought...did you know that when you visit your investment in Belize that it's tax deductible?

Monday, October 19, 2009

I have always had great success in using think-tanks to come up with new ideas and solutions in my companies.

Don’t limit to only one department with one mindset. My most successful think-tanks are a team of creative thinkers with diverse backgrounds who can offer different slants and perspectives.

As the think-tank leader, you should explain the mission, i.e. “New ways to increase market share.” You should be the moderator that keeps things on pace but no one, including you, dominates the conversation. Your tank-mates can create valuable ideas quickly if they operate within a set game plan.

Here are 13 Rules that will help you succeed:

1. No egos allowed. I have a sign outside my conference room that says “Please leave egos here.” You’re not in the tank to impress others with your brilliance and monopolize the time. A good think-tank is a cooperative supportive team where all thoughts are welcome and shared, and only the team succeeds.

2. Use a dry-wipe whiteboard. The bigger the better. I once had an entire wall in the conference room wallpapered with dry-wipe paper so we could get more ideas. If you can’t get a white board, use a large lecture paper pad. I prefer that each member have their own marker and go to the board with their ideas.

3. Stay on topic. Your idea for an iPhone microwave oven app is awesome, but not during a session on how to improve customer service.

4. One conversation at a time. When different conversations are going on within a team, no one can focus.

5. Encourage each other to participate. Often the shy person has great ideas that they’ve been quietly thinking about.

6. Go for volume. Getting to 100 ideas is better than 10. The more ideas you have the more chances you have for quality ideas. Try setting a goal for the number of ideas you'll get to in a certain amount of time to provide incentive.

7. Think fast & keep it short. Impulse thoughts and ideas are often sound and worthwhile. Got an instant thought? Write it on the board.

8. Encourage wild ideas. As Albert Einstein said, “If at first, the idea is not absurd then there is no hope for it.” Most great ideas and inventions were first silly ideas. (but remember #3)

9. Headline your idea. Make it quick and sharp, then move on to the next one.

10. Be visual. Sketch your ideas out for your tank-mates. It will communicate them more clearly than words alone, plus it might inspire some new ideas.

11. Review and build on the Ideas of others. This leverages the perspectives of diverse teams and can be especially useful when you feel like you're stuck.

12. Withhold judgment. Don't block someone else's idea. If you don't like it, look at it on the whiteboard and maybe you'll be able to build on it later. Remember, this is a Think-Tank, not a Shark-Tank.

13. Summarize and condense for action items. Assign action steps to follow through with sound ideas.

Have Fun. Even when the topic is serious, try to keep the pace loose. Anger and worry hamper creative thought. I’ve had great success with after-hours sessions over pizza and beer. If that’s against your rules, at least have brain fuel and energy snacks.

A good think-tank session not only produces results, it strengthens communication and inspires all participants to be more creative and think for the good of the company. Using these simple guidelines will help make your think-tank session a brainstorm instead of a drizzle.

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Steve Baker

About Me

Steve Baker is a founder of successful businesses, a corporate executive and business advisor with proven leadership in every phase of business cycle from startup to exit. He directs strategic marketing and business development and has taken companies from startup to millions of dollars in revenues. He is a Senior Fellow of the DaVinci Institute, a futurist think tank, and host of the Startup Junkie Underground. As a public speaker, Steve shares his contagious enthusiasm to educate and inspire startup businesses and university students.
Steve is passionate about business and life, and lives in Colorado where he is an avid poor golfer.